NorthEdge makes a move into the healthcare market

NorthEdge Capital has backed the management buyout of award-winning healthcare manufacturer, Direct Healthcare Services. A specialist provider of pressure area care solutions, DHS works closely with tissue viability nurses to design and manufacture mattresses, cushions and overlays to enhance the quality of patient care across the UK.

Founded in 2009, DHS works with a range of healthcare clients, including acute and community NHS Trusts, and exports to over 20 countries worldwide. The company employs over 80 staff and in 2015 expanded its manufacturing facility by 40 per cent to 45,000sq.ft. and invested in new state-of-the-art machinery in order to meet growing demand for its products.

Earlier this year, DHS received the Queen’s Enterprise Award for Innovation for their Dyna-Form mattress, which is designed to save the NHS vital time and resources by reducing the incidence of pressure ulcers in hospital patients.

The firm has a considerable portfolio of intellectual property (IP) rights and will use NorthEdge’s investment to further its commitment to core IP, expand the team, pursue a buy and build strategy and accelerate growth into international markets.

The buyout was led by DHS CEO Graham Ewart, European Sales Director Stuart McAllister, Operations Director Gerry Boyle and Asia Pacific Sales Director Dermot Patterson. Jon Lewis will stay on as R&D Director. Under their leadership, sales have grown by more than 50 per cent over the past two years to £10.6m.

NorthEdge has acquired a majority stake in the company and the investment team was led by Ray Stenton, Partner and Head of New Business, Jon Pickering, Director, and George Potts, recently promoted to Investment Manager.

Michael Joseph, Chairman of NorthEdge, will join the Board and George Potts will join as an Observer.

Graham Ewart, CEO at DHS, said: “The partnership with NorthEdge is a significant milestone for DHS. We are fortunate to be working with a team who not only share our vision for business growth, but fully support our unremitting dedication to delivering the best customer value.

“This funding allows us to accelerate our growth aspirations and continue to invest in what matters most to our customers – delivering genuine innovation. With a top class management team now in place and the support of NorthEdge we are truly excited about what we can achieve together.

Jon Pickering, Director at NorthEdge Capital, said: “It has been a pleasure working with the team at DHS and we are delighted to conclude this investment. The team has a robust plan in place and I am confident that with our M&A expertise and ability to offer follow-on funding, their market-leading platform will continue to develop even further.”

NorthEdge was introduced to the deal by BBCH Capital and received corporate finance advice from Clearwater International (Mike Reeves, John Clarke, Ramesh Jassal and James Kennedy). Legal advice was provided by Addleshaw Goddard (Paul Medlicott, Oliver Hincks, Ed Hamilton and Helena Drury).

Other advisers on the deal included: CIL (Commercial due diligence), BDO (Financial and tax due diligence), Manufacturing Institute (Operational due diligence), KPMG (IT due diligence and tax structuring), Diagnostic Capital (Strategic due diligence), Marsh (Insurance due diligence) and Blackwood (Management due diligence).